By EDWIN OKOTH

In Summary

The Ethics Hotline Service provides a company with a whistleblower hotline and an online platform where employees can raise the alarm without revealing identity.

Surveys show that many businesses suffer immensely from employee theft. In fact the vice has been cited as one of the main reasons many start-ups fail to make it beyond the second year.

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A busy electronic shop on Kimathi Street, Nairobi, is renowned for selling genuine electronics having been in existence for decades.

Ms Isabella Mwashigadi was convinced by a friend that the shop sells genuine products and was encouraged to buy an external hard disk from the shop. She was slightly shocked by the high price but because it was of good quality, she decided to put in just a little bargain.

“I was told a lower price would only be possible if I waited outside the shop and the gadget would be delivered to me without receipt. I called my friend to seek his advice and he told me to cooperate because that is normal. I found it a bit too risky and left,” Ms Mwashighadi told Money.

Surveys show that many businesses suffer immensely from employee theft. In fact the vice has been cited as one of the main reasons many start-ups fail to make it beyond the second year.

According to the 2012/2013 Economic Survey on the Global Retail Theft Barometer (GRTB), organised retail crime is a major concern with the Sh200 billion retail trade market in Kenya said to be losing an estimated Sh3 billion annually.

The Statistics from GRTB reveal that global shrinkage owing to customer theft, employee theft and general stock losses due to internal system errors in 2011 alone, exceeded $119 billion.

Audit, tax and advisory firm KPMG says the reality of employee fraud in today’s businesses informed its latest product in the market to allow for safe whistleblowing.

Whistleblower

The Ethics Hotline Service provides a company with a whistleblower hotline and an online platform where employees can raise the alarm without revealing identity.

KPMG then passes the information to the relevant business channels who can then exercise caution as it investigates potential loss in revenues from employee-related theft.

The vice has grown from small-time theft from shelves of pocket size items into a complicated web of perpetrators who have mastered the art of dodging many established control mechanisms. Now thieves target high-value products such as electronics, furniture, baby food products, cosmetics and general food items.